Which of the Following Statements Best Describes the Application of the Continuity

question 90

Multiple Choice

Which of the following statements best describes the application of the continuity of enterprise principle to a Type A tax-deferred reorganization?

• A)The continuity of business enterprise principle must be satisfied for both the acquirer and the target corporation.
• B)The continuity of business enterprise principle must be satisfied for only the target corporation.
• C)The continuity of business enterprise principle must be satisfied for only the acquirer.
• D)The continuity of business enterprise principle does not have to be satisfied as long as the business purpose principle is satisfied.

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Definitions:

Ratio

A quantitative relationship between two numbers showing how many times the first number contains the second or is contained by it.

Ratio

A quantitative relationship between two numbers indicating how many times the first number contains the second.

Ratio

A quantitative relationship between two numbers, showing how many times the first number contains the second.

Ratio

A quantitative relationship between two numbers indicating how many times one value contains or is contained within the other.